The White House and congressional leaders are giving no indication that the $85 billion in mandatory across-the-board federal spending cuts known as the sequester will be lifted any time soon.
Two days have passed since President Obama signed the order to reduce the budget of most government programs by between 5 percent and 7 percent, but with weeks remaining for sequestration’s stronger effects to gradually fester, politicians confirmed today the near future will amount to yet another game of chicken in the nation’s capitol, maybe indefinitely.
On ABC’s “This Week,” White House economic adviser Gene Sperling said he expected Republican opposition on Capitol Hill to eventually succumb to constituent pressure.
“My belief is that as this pain starts to gradually spread to communities affected by military spending, to children who need mental health services, to people who care about our border security, I believe that more Republican colleagues who are concerned about this harm to their constituents will choose bipartisan compromise on revenue raising tax reform with serious entitlement reform,” he told anchor George Stephanopoulos.
The White House says Obama spent Saturday on the phone with senators of both parties over a compromise.
But in an interview aired on NBC this morning, House Speaker John Boehner admitted while he wasn’t sure how the government’s ongoing fiscal woes could be resolved, after months of dire warnings from both sides it was unclear whether sequestration would even have a negative consequence.
“I don’t know whether it’s going to hurt the economy or not,” he said. “I don’t think anyone quite understands how the sequester is really going to work.”
As the Friday deadline passed both parties remained at an impasse over the central question that has plagued this debate for over a year: Whether to include new tax revenue in a broader deficit reduction deal.
The White House has insisted on more revenue through the closing of tax loopholes that benefit top income brackets. Meanwhile, Republicans have largely balked at the idea, although their leadership has indicated they could agree to new revenue under the condition it was used solely on the deficit — not to finance new government spending.
Today Boehner stuck to his party’s stance that they had already yielded revenue to the president during the “fiscal cliff” negotiations, which saw income taxes increase on household income over$450,000.
“The president got $650 billion of higher taxes on the American people on January the first,” he said. “How much more does he want?”
On CNN the Republican leader in the Senate, Mitch McConnell, was asked if he could assure the sequester wasn’t here to stay.
“I’m absolutely confident we’re going to reduce spending the amount of money that we promised the American people we would in the law the president signed a year-and-a-half ago,” he responded.
Some Capitol Hill watchers suggest the cuts may remain in place until at least the end of the fiscal year, Sept. 30. Meanwhile, the non-partisan Congressional Budget Office has estimated that 750,000 jobs could be lost if the sequester is allowed to be fully implemented and the country’s GDP would shrink by up to half a percent.
While the parties continue to duke it out over these budget cuts at least one crisis appears to have been averted: On Friday Democrats and Republicans appear to have agreed to not allow the sequester to get in the way of negotiations to continue full funding for the federal government. The funds are slated to run out on March 27.